Global commercial insurance rates continued to fall in the final quarter of 2025, marking a clear turn from the hard market that began around 2018. According to Marsh Risk’s Global Insurance Market Index, overall commercial rates declined by an average of 4% in Q4 2025, the sixth straight quarter of decreases after seven years of steady increases. Property led the slide, with double-digit declines across several regions, while casualty remained an outlier, rising 4% globally due to US activity.
Canada is firmly on the softening side. Composite commercial rates fell 7% in Q4 2025, broadly in line with other major regions outside the US. For Canadian buyers, the question is no longer whether the market is soft, but how to make the most of this window.
Marc Major (pictured), global placement leader at Marsh Risk Canada, situates the Canadian trend within the broader global picture, noting the shift is largely due to catastrophe activity.
“We’re not seeing the catastrophic losses that predated 2024,” he said. “Leading up to the major shift when 2024 commenced, we had a lot of natcat losses that were impacting the global insurance marketplace.”
While Canada has experienced some events, including wildfires, their impact was relatively mild. “With the exception of a few wildfires… that didn’t have as great an impact as we would have seen in prior years,” Major said.
The second factor is capital. Reduced major loss activity, higher interest rates, and a comfortable reinsurance environment have restored underwriting confidence and freed capacity globally, including in Canada. This is reflected in both existing insurers broadening their appetite and new entrants joining the market.
Major emphasizes that what a risk manager or CFO should do in this environment depends heavily on sector, exposure profile, and balance sheet pressures. “I think it’s actually different depending on who the buyer is,” he said.
“Given the geopolitical and economic uncertainty that exists… depending on your industry sector, you may be more prone to evaluate new exposures that you had never looked at before, whether that be parametric risks, whether that be cyber exposure.”
For some, the priority will be near-term savings.
Read more: Marsh Risk Canada names new leader
But for others, particularly those less exposed to global volatility, the soft market can be a chance to fix structural issues. That could mean higher limits, broader wording, or coverage lines that were difficult to place during the hard market.
Outlook for 2026
Looking ahead, Major expects the softening to continue but with moderation. “I expect that we're going to continue to see a softening and a competitive price environment in Canada for 2026,” he said. “If I had a crystal ball, that’d be my outlook.” This is based on a relatively light catastrophe year in 2025 and stable reinsurance renewals.
However, he does not expect a repeat of last year’s dramatic rate moves. Large, double-digit reductions are unlikely, and Canadian insurers are well aware of the need to remain competitive while managing pressure from abundant capital in the market – avoiding what he calls the “craziness” of steep swings.
Think beyond the next renewal
Major’s central advice is to avoid short-term thinking. “We know that the current economic and geopolitical situation is likely not going to just wrap up in the next 12 months,” he said. “So, for that reason, what are some long tail impacts that could affect your business that you might be able to solve for or put risk management programs in place today?”
Focusing on Canada specifically, he said risk managers should widen their lens and examine the broader ecosystem in which they operate. He noted that the Canadian economy is heavily oriented around natural resources, which means organizations need to pay close attention to how those commodities – from mining and forestry to energy and power – are shipped and transported. He added that businesses should also think carefully about what supports those sectors and how their export flows shape overall risk exposure.
The lesson: a softening market is not just about saving on price. It’s an opportunity to strengthen coverage, address long-term exposures, and manage risks across the value chain — including those that originate outside your own walls. “Thinking of how the world connects and the ports and other things is [critical],” Major said. “Someone else’s loss” can have a material impact on your own business.
